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Water-Saving Technology and Efficient Tariffs

Author

Listed:
  • Friedman, A.

    (State University Higher School of Economics, Moscow, Russia)

Abstract

Dynamic model of efficient allocation of water with three sources of water supply (groundwater, surface water and the recycling technology with limited capacity) is constructed and analyzed. It is shown that in case of binding capacity constraint we can abandon the use of groundwater at some moment and then revert to it some time in future. Efficient path could be decentralized under suitable water tariffs. Comparative analyses of water tariffs for the two users that differ only in terms of the availability of recycling technology are undertaken.

Suggested Citation

  • Friedman, A., 2010. "Water-Saving Technology and Efficient Tariffs," Journal of the New Economic Association, New Economic Association, issue 8, pages 35-53.
  • Handle: RePEc:nea:journl:y:2010:i:8:p:35-53
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    File URL: http://www.econorus.org/repec/journl/2010-8-35-53r.pdf
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    References listed on IDEAS

    as
    1. Jihad Elnaboulsi, 2009. "An Incentive Water Pricing Policy for Sustainable Water Use," Post-Print hal-00447922, HAL.
    2. Noel, Michael, 1978. "Resource extraction and recycling with environmental costs," Journal of Environmental Economics and Management, Elsevier, vol. 5(3), pages 220-235, September.
    3. James E. T. Moncur & Richard L. Pollock, 1988. "Scarcity Rents for Water: A Valuation and Pricing Model," Land Economics, University of Wisconsin Press, vol. 64(1), pages 62-72.
    4. Schuck, Eric C. & Green, Gareth P., 2002. "Supply-based water pricing in a conjunctive use system: implications for resource and energy use," Resource and Energy Economics, Elsevier, vol. 24(3), pages 175-192, June.
    5. M. Hoel, 1977. "Resource Extraction and Recycling With Environmental Costs," Working papers 197, Massachusetts Institute of Technology (MIT), Department of Economics.
    6. Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2006. "A Hotelling model with a ceiling on the stock of pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2875-2904, December.
    7. Swierzbinski, Joseph E & Mendelsohn, Robert, 1989. "Exploration and Exhaustible Resources: The Microfoundations of Aggregate Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 175-186, February.
    8. David Levhari & Robert S. Pindyck, 1981. "The Pricing of Durable Exhaustible Resources," The Quarterly Journal of Economics, Oxford University Press, vol. 96(3), pages 365-377.
    9. Chakravorty, Ujjayant & Umetsu, Chieko, 2003. "Basinwide water management: a spatial model," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 1-23, January.
    10. David Zilberman, 1997. "Allocation and Pricing at the Water District Level," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 952-963.
    11. Jihad Elnaboulsi, 2009. "An Incentive Water Pricing Policy for Sustainable Water Use," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(4), pages 451-469, April.
    12. Zarnikau, Jay, 1994. "Spot market pricing of water resources and efficient means of rationing water during scarcity (water pricing)," Resource and Energy Economics, Elsevier, vol. 16(3), pages 189-210, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    exhaustible resources; water recycling; decentralization;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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